To Build a Better Grid

Workers install a solar panel on a household within the Jeju Smart Grid project site. More than 2,000 homes along Jeju’s northeastern coast have been connected to the test grid.Credit
SK Telecom Consortium

JEJU, SOUTH KOREA — Lim Ki-choo has lived most of his life in a modest stucco house on Jeju, this pleasant freckle of an island off the southern tip of South Korea. He was a village leader in days gone by, and before that he ran a bank for local fishermen. All of which suggests that Mr. Lim, 84, has a certain standing here. Yet, he says, he’ll be damned if he can figure out how to work the controller the electric company gave him that runs all the new gizmos in his house.

“I haven’t picked up on it very quickly,” said Mr. Lim, looking puzzled as he studied the electronic tablet with its multiple screens, sexy icons and whiz-bang graphics. “My grandchildren, when they come over, they adjust it for me.”

Technical challenges aside, Mr. Lim is a pioneer; the first person in his village to have his house wired into the Smart Grid Test Bed, a kind of municipal power grid in miniature and one of South Korea’s newest and most ambitious high-tech experiments. The $220-million pilot project is aimed at reducing an area’s electricity costs and energy consumption, through the use of smarter technologies, increased efficiency and more renewable energy sources.

The Smart Grid is about more than just Jeju; it is a strategic investment. South Korea is betting that making progress in combining smart technology and green energy in one ecosystem will allow it to build larger grids for cities. The national government — and its private partners — are also hoping that they will eventually export the system to cities around the world. As the world’s urban population grows, energy consumption and costs are likely to be one of the brakes on economic development.

The government says the test grid in Jeju is the largest such project in the world. The Knowledge Economy Ministry — which promotes foreign investment in Korea and guides the country's sustainable-energy policy — says the government is investing $60 million in the grid project, with 168 private companies putting up an additional $160 million.

The companies include units of SK Telecom, LG, the telecommunications giant KT, Korea Electric Power, Hyundai and other industrial giants.

As July, more than 2,000 homes along Jeju’s northeastern coast have been connected to the test grid. The first phase of the project ended in June with the wiring of the houses, which received new electrical meters, switches and other smart technologies that allow the power company and appliances in the homes to, in effect, talk to each other and use energy when it is cheapest.

Some 150 of the homes in the project, including Mr. Lim’s, also have solar panels and storage batteries. The small number is mostly due to the cost: each setup costs $15,000 — which has been an impediment to solar energy’s growth around the world. Here, the cost is split between the government and SK Telecom, the corporation leading the project in Mr. Lim’s area.

Additionally, 31 homeowners are driving electric cars and charging them at specially built AC/DC stations.

Engineers say they are certain the smart grid will immediately increase energy efficiency and reduce consumer’s bills, even before consumers are fully adept at using their new devices. “A 5 to 10 percent savings, for sure,” said Mr. Park. “At least.”

The timetable calls for three or four South Korean cities to start using smart grid technologies by the end of 2013, when the grid project concludes. “And there’s a big competition now among the city governments,” said Park Kyeong-jong, senior manager of the Jeju Smart Grid Team for SK Telecom.

South Korea invested just $20 million in clean energy research in 2009, placing it 19th among the Group of 20 industrialized nations. But new legislation requires that at least 2 percent of gross domestic product be spent on the research and development of renewable energy. And companies will be required to source 10 percent of their power from renewables by 2022.

“More than anything, what South Korea can do now is keep its promises,” said a 2010 report from the Pew Environment Group, noting that the government has “laid the groundwork for a boom in clean energy spending.”

The smart grid concept is hardly unique to Korea, and other countries, corporations, local governments, universities and electric utilities also are experimenting with similar projects. Indeed, South Korea analyzed and tried to improve on foreign projects in planning the Jeju grid, notably a program in Boulder, Colorado, according to Lee Ok-hun, a secretary with the Knowledge Economy Ministry and the government’s lead official on the Smart Grid Test Bed.

An error has occurred. Please try again later.

You are already subscribed to this email.

The essential idea, however, is the same worldwide: building an electric grid that allows for a two-way “conversation” between the local power provider and its residential and commercial customers.

This conversation is enabled by new meters and devices installed inside a home, a business or an office building that send information about energy use back to the utility company, sometimes known as a demand-response company. The hardware already exists and the basic technology is hardly 22nd century. The principal challenge, experts say, is ensuring that the new two-way conversation (whether using phone lines, cable or wireless connections) is stable, reliable and secure.

Once the buildings are “smartened up” and plugged in to the utility company, customers can check their energy use down to each light, each socket, each device, every appliance. Most importantly they can track the price of electricity minute by minute, allowing them to operate their power-hungry appliances when electricity is cheapest.

A new generation of smart appliances (from fridges and air conditioners to furnaces and hot-water heaters) will also help with the efficient use of power, devices that can turn themselves down — or even off — when they’re not needed or when the price of power is spiking. Conversely, a smart appliance can be programmed to turn itself on when the cost of power dips.

If the local electric company has too much supply or very little demand at, say, 2 a.m. on a Wednesday, the utility will drop the price per kilowatt-hour. Conversely, if power supplies are reduced and/or consumer demand is up, the price of electricity will increase. In either case, the consumer will know the price in real time.

So Mr. Lim (or more likely one of his grandchildren) can load his smart washing machine with dirty laundry and program it to start whenever electricity goes “on sale” — that is, when it drops to a certain price point.

With the smart grid in place, the demand-response company is constantly relaying the price of power to the Lim household, feeding the information to the in-home digital tablet that SK Telecom calls the “gateway.” The gateway can talk to all the smart-enabled appliances in the house — “M2M” in tech lingo, for machine-to-machine — and when the price of electricity drops, Mr. Lim’s smart washing machine receives the information and, presto, turns itself on.

Mr. Lim has thus saved money by using cheaper, off-peak power, and the utility has sold some power that otherwise would have been lost. The utility will also be able to chart energy use by house, by neighborhood, by time of day, by season — the better to gauge and prepare for future energy demands.

Mr. Lim’s actual footprint was already quite small — basic household lights, one small air conditioner, a TV, a refrigerator, a washing machine and, in the winter, heating pads in the bedroom. He and his wife use propane for the furnace, the stove and the hot-water heater.

“No karaoke machine,” he said with a laugh.

Because SK Telecom installed a solar array on his roof in July 2010, Mr. Lim also has been able to generate, store and tap his own electricity. So he is both a producer of power and a consumer. The buzz-word now being used is “prosumer.”

“I didn’t know if my electric bills were expensive before or not, because they were like any other bills: The bills came, I paid them and that was it,” said Mr. Lim. “But after the devices were installed I realized the electric bill could be much lower.”

Sometimes, when the sun is out and his storage batteries are topped off, Mr. Lim’s solar array will send surplus power back to the main grid. His electric meter actually runs backward, thus reducing his bill. For the four months from February and May, his monthly electric bill was effectively zero — just 420 won, less than $4, for the basic monthly connection fee.

When Mr. Lim first installed his solar panels, many of his neighbors thought them unsightly. “Now,” he says, “they all want one. There’s a waiting list.”